U.S. SUGAR BEGINS 2005-2006 HARVEST SEASON
SUGAR PRICES STABLE DESPITE RECENT NATURAL DISASTERS

CLEWISTON, FL — October 14, 2005 – Although the 2005-2006 harvest season was delayed several days due to rain, U.S. Sugar began harvesting sugarcane today on its eastern farms for delivery to the Bryant Mill. Harvest on the western farms for delivery to the Clewiston Mill is scheduled to begin next week. With the harvest season expected to run 172 days, the Company is scheduled to harvest 168,658 acres, yielding an estimated 6.3 million tons of cane. Last year’s storm-riddled season produced 5.9 million tons.

“Although we continue to have cane damage from the unprecedented hurricanes and heavy rains last season, we had a good growing season this summer and are looking forward to a more normal harvest,” said Robert Coker, senior vice president, public affairs of Clewiston, Florida based U.S. Sugar. “Even as harvest and processing begin, construction continues as we expand and modernize our Clewiston Mill and Refinery. When completed in 2007, our Clewiston sugar processing operations will be among the largest and most efficient in the world,” Coker stated.

According to Coker, recent free trade agreements and ongoing negotiations with additional sugar-producing foreign countries mean more foreign sugar entering the U.S. market. The increased efficiency of the new milling operations is aimed at ensuring that U.S. Sugar is competitive into the future.

At a time when world sugar prices are at a decade high, domestic sugar prices remain stable. Though the deadly storm seasons of the past two years have caused significant losses among Florida and Louisiana sugar producers, they have had virtually no effect on consumer sugar prices—a fact directly attributable to U.S. sugar policy, said Coker.

"These natural catastrophes, combined with increasing U.S. sugar consumption, could have led to a real crisis," noted Coker. "Yet sugar supplies and prices have remained stable, because U.S. sugar policy is flexible and effective. If our nation's oil policy worked as well as sugar policy does, we wouldn't see those price spikes at the gas pump."

Last year, Florida suffered an unprecedented four hurricanes, costing the state's sugar growers—who produce one quarter of the nation's sugar supply--30 percent of their crops and some $300 million in lost revenues. This year, southern Louisiana’s sugarcane crop was devastated. First hurt by Katrina, growers were hit even harder by Rita, which brought salt water 15 miles inland and flooded crops under six feet of water. The storms could cost Louisiana sugar producers as much as three-quarters of their crop, a loss that could be felt for years.

Immediately following Katrina, the U.S. Department of Agriculture allowed the release of an industry-funded surplus sugar reserve of 500,000 tons, and then increased imports by about 200,000 tons. As a result, sugar prices to individual consumers and food companies, already nearly a third lower than those of other developed countries, will stay stable.

The U.S.—the world's largest consumer of sugar and natural sweeteners—produces more than 80 percent of these supplies in a domestic free market that operates at no cost to taxpayers. If U.S. farmers produce more sugar than they are allowed to sell, based on annual government estimates, they store the surplus at their own expense. In times of unforeseen shortages caused by events such as hurricanes, domestic surpluses and additional imports address any shortfalls.

"U.S. sugar policy helps level the playing field for efficient domestic producers," Coker said. "Without this policy, cheap foreign sugar imports could drive domestic producers out of business, making the U.S. completely dependent on imported sugar. And if our experience with imported oil has taught us anything, it's the importance of retaining as much independence as possible over products that are essential to our economy and our people."